As is well known in the art, a car, for example, may be ordered by a car dealer after a customer has provided specifications such as a model type, a body color, some options to be installed, and so on.
As shown in FIG. 6, when the car is ordered the dealer may check the state of its stock or inventory. If a car is not in stock that has the specifications desired by the customer, the dealer may place an order with the manufacturer on behalf of the customer, and advise the customer of an expected delivery date based on the manufacturer's production plans.
The manufacturer may develop a monthly production plan in accordance with a marketing target determined on the basis of various information. At a finer level of detail, a daily production plan may also be set up. Typically, these production plans are not based on the orders received from customers; rather, they are speculative.
On a typical production line, cars having many different kinds of specifications may be manufactured in sequence. Depending on the options selected, some cars take longer than others to assemble. When cars requiring above-average assembly time are assembled back-to-back on the line, congestion and excess worker loads may result.
Accordingly, the above mentioned daily production plans generally attempt to smooth variations in production time and workloads, for example based on a rule that certain types of cars requiring above-average assembly times be scheduled as every N-th car in the assembly line rather than back-to-back.
Unfortunately, this approach has significant drawbacks, as follows.
First, a problem arises that both the manufacturer and the dealer need to keep a certain level of stock, which is often quite uneconomical.
Also, production plans as described above are difficult and expensive to create, and sometimes require a certain kind of intuition in view of the various skills and capabilities of the workers who actually assemble the cars. For the latter reason such plans are not readily amenable to creation by computer program.
Nevertheless, there has been a recent increase in customer interest in ordering cars rather than accepting cars from dealer stock.
In prior production systems, tailoring a customized car to a customer's specification may disrupt the monthly or daily production plans. For the reasons mentioned above, however, it is difficult to change production plans once they are set. As a result, economic inefficiencies arise, and a customer who orders a built-to-order (BTO) car must wait an undesirably long time for the order to be filled. Thus the production of built-to-order cars is, by some measures, nearly impractical.